Reseller Trade Division

40 San Miguel Avenue, Mandaluyong City

1550 Metro Manila, Philippines
Tel. No. 886-3888
Fax No. 884-0940

A Primer on

Petron Dealership Program

Thank you for taking an interest in the Petron dealership program.

The Petron dealership program presents a unique opportunity to a good man to set up
his own business that will offer unlimited growth and potential. You will reap rewards
in proportion to your efforts.

We hope that this will open the door of a great opportunity for you and your family.
Good Luck!

Contents:

1. Petron Corporate Profile

2. The Service Station Business
3. Dealer Selection Process
4. Selection Process
5. How to Apply
6. Dealer Application Form
PETRON... a great reputation
The “Petron” brand is backed by a great reputation – something we work hard at
each day...then and now....

Something we work hard at each day...

Petron was born out of the purchase by the Philippine National Oil Company
(PNOC) of Esso Phils., on December 21, 1973 and the subsequent integration of the Filoil
Companies in April 1974. This proved to be a masterstroke, pooling together a
formidable core of exceptional managerial and technical competencies, resources, and
capabilities in the local oil industry.

As a wholly-owned subsidiary of PNOC, Petron’s initial mandate was to ensure

adequate oil supply nationwide. Through the 1973-74 oil embargo, subsequent Middle
East crisis and natural calamities, Petron was able to live up to this challenge. Petron
dealers in calamity stricken areas were often cited for public service for bringing in
much needed fuels and support for victims and community.

In August 1994, Petron became a private corporation with the sale of 20% of
PNOC stocks to the public. Earlier, Saudi Aramco won the bid for a 40% share.

This gave Petron a strategic partner in Saudi Aramco assuring unlimited oil
supply and widest ownership base.

Petron, in pursuing this mission, emerged the consistent leader in the industry
in sales and profitability.

Now...

Petron continues to be the top oil company – serving over 40% of the domestic oil
market.

In March 2008, Ashmore Investment Group (London-based investment group)

through its nominee SEA Refinery Holdings B.V. purchased the 40% share of Saudi
Aramco, dawning a new chapter in Petron’s history. Ashmore is a leading investor in
emerging markets, focusing exclusively on developing economies, with holdings in
power generation, telecommunications and utilities.

Ashmore also offered a tender offer to buy the shares of other shareholders, and
by July 2008 had acquired an additional 10.57% of Petron shares (thus becoming the
majority owner of the company at 50.57%.)

On December 23, 2008, PNOC sold its remaining 40% shares to SEA Refinery
Corporation (SRC), a local subsidiary of SEA Refinery Holdings B.V. In their respective
SEC filing, SEA Refinery Holdings B.V. indicated 40.47% ownership in Petron, while SEA

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Refinery Corporation indicated 50.1% ownership in Petron. The remaining 9.43% is
owned by the public.
It was also at this period where San Miguel Corporation (SMC) entered into an
Option Agreement with SEA B.V. where SMC is given the option to buy out SRC within a
two-year period ending on December 23, 2010. As part of the option agreement, SEA B.V.
allowed SMC to take seats in Petron’s Board of Directors and appoint key officers.

Distribution Channels

Petron has a nationwide network consisting of 32 terminals, bulk plants and

sales offices that supply industrial accounts, and over 1,288 service stations serving
urban centers, towns, fishing villages, and even remote highlands.

Refinery

Petron has its own petroleum refinery at Limay, Bataan, capable of refining
180,000 barrels of crude oil per day. It holds the distinction of being the only refinery in
the country with an integrated computer-based operation for optimum cost-
effectiveness. It is also the first to expand desulfurization capacity for more
environmental friendly products.

In April 2008, Petron commissioned the country’s first petrochemical feedstock

units, namely, a Petro Fluidized Catalytic Cracker (PetroFCC) and a Propylene Recover
Unit (PRU). This development is part of Petron’s long-term diversification strategy. A
Benzene-Toulene-Xylene (BTX) unit is currently under construction which shall also
produce additional petrochemical feedstocks.

Products

Petron has a complete line of petroleum products for industrial, commercial,

motoring and household applications for local and international markets. Top sellers
are Petron Gasul, the leading brand in LPG, ULTRON and REV X (with the highest API
rating in the market) lubricants, Petron Sprint 4T Motorcycle lubricants and Xtra
Unleaded for gasoline fed engines.

At present, Petron has 5 fuel brands in the market and these are Blaze (96 +
Octane), XCS (95 Octane), Xtra (93 Octane), Diesel Max and Petron E-10 (95+ Octane)
which contains 10% Ethanol blend that was introduced in June 2008 and in now
available in more than 40 select stations. Aside from these Petron also sells Regular
gasoline and Kerosene at the service stations.

“A Culture of Professionalism”

Personnel

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Petron prides itself for the quality of its personnel. As of January 2009, the company has
1279 regular employees of which 90% have college degrees. Anyone from the ranks can
rise to an executive position by excellent performance and continuous training and
self-improvement as exemplified by the ranks for senior management today. This is a
deeply respected tradition which promotes a culture of professionalism, a culture that
puts work first before anything else. A culture that is customer oriented.

THE BUSINESS OF SERVICE STATIONS

The business of service stations is basically a retail operation – buying, storing, and
reselling fuels, lubricants and company sanctioned products at the right quality and
time customers need them. On this score, all service stations are the same.

But why do some stations have more customers than others?

These factors are thought to be important in influencing motorist’s choice of station:

Location
Travel time and accessibility

Station characteristics
Station appearance
Merchandising
Quality of customer service
Personnel
Advertising and promotions

Image of the station

Brand equity
Price
Business reputation of the dealer and public relations

Quality of competitive outlets

As you can infer from these factors, the business of service stations is not merely
a matter of getting the “nozzle in the tank”. It is more of making sure that the
motorists come back again and again and it all boils down to the ability of
delighting customers more consistently than competition.

That is where the challenge of a dealership lies.

Types of Service Stations

Petron has three types of outlets:

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 Company-owned service stations (COSS) – These are stations built, equipped and
maintained by the company on either company-owned or leased lots. They
usually have complete station facilities such as driveway, salesroom, service bays
and convenience facilitates.

COSS dealer provides the operating capital which ranges from P = 4 million to P
=9
million depending on the size and array of services offered by the station. This
covers among others stocks, tools and equipment like lubricators, wheel
balancers, wheel aligner and for granting credit, accommodations. Dealer pays a
monthly rental for the service station facilities.

Dealer Owned Service Stations (DOSS) – These are service stations built and
financed by the dealer who is usually the owner of the lot.

The company provides the major equipment like underground tanks, dispensing
pumps, lifters and compressors which in themselves constitute a major
investment.

DOSS are generally smaller outlets limited to filling activities as those found in
small towns and fishing villages. However, there is also a number of large DOSS
in urban areas.

Micro Filling Stations (MFS)

Tenure of Dealership

Dealers of company and dealer-owned stations sign a dealership contract with

the company covering a minimum period of three (3) years. The contract is
renewable for additional three-year periods based on the performance of the
dealer.

Transfer of Dealership

A dealer cannot transfer the dealership to his heirs or to anyone by succession,

sale, assignment, etc. That right rests solely with Petron.

Reseller Trade Division

The function of maintaining, developing and ensuring the success of retail

dealerships fall under the Reseller Trade Division of Petron.

Other questions pertaining to service station operating procedures will be entertained

during an orientation for serious applicants.

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 DEALER SELECTION PROCESS

Petron puts a lot of effort and care in the selection of dealers because careful selection is
everything in the success of a service station.

Dealers are “PETRON” to the public. They are therefore the main link between the
company and the largest number of its customers – the motorists. They can enhance the
value of the Petron image or ruin it depending on the way they serve the motorists.

A dealer who fails to give friendly, prompt and efficient service or fails to maintain
accepted standards of appearance of the station and personnel discredits the Petron
image and harms the business of his fellow dealers.

What then are the qualities of one who eventually joins the family of Petron dealers?

Let us answer this by pointing out the common traits shared by our best dealers:

❖ They like people and serve them well.

❖ They find satisfaction in helping others solve their problems.
❖ They treat their people well.
❖ They talk to the personnel and ask their ideas and problems.
❖ They are proud of the Company and their business.

To be sure, those who exhibit these qualities consistently win and command the
highest share of the market in their trading area and enjoy the highest returns on their
investment.
Now take a look at the checklist of Selection Criteria and see how many of this attributes
you possess. Following this is the Performance Criteria, which at this point, you ought
to know to be able to assess your fitness with the business.

Musts:
1. Must meet established capitalization required for a given dealership (this will
range between P = 4 million to P
= 9 million depending on the type of trade and type
of station available).
2. Must be able to dedicate most of his time, if not all, in running the station.
3. Must be dynamic and have the aggressiveness and desire not just to operate a
service station business but to be the number one in his trading area.
4. Must be perceptive to new ideas and suggestions, pleasing in personality, and
have good moral character that will assure the company of loyalty.
5. Must be willing to undergo a four-week Dealer Management course
6. Must have no past record of criminal case.
7. Must not be operating any existing Petron station or that of any other oil
company.

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Wants:
1. Desirable if the spouse and/or any other member of the family can help in the
business.
2. Desirable if applicant’s capitalization is backed-up by real estate properties for
use as future collateral in expanding the business.
3. Desirable if applicant has previous record of business or employment success.
4. Desirable if applicant has no known vices
5. Desirable if service station can become his full-time business
6. Desirable if applicant is a member of any civic group in the community, i.e.
Rotary, Lions, Kiwanis, Jaycees, etc.
7. Desirable if applicant is a resident of the community where the station applied
for is located
8. Desirable if dealership is single proprietorship.
9. Desirable if applicant is not more than 45 years of age.

Performance Criteria

▪ Quantitative:
• Sales volume growth
• Market share
• Financial – sales revenue, profits and return on investments

▪ Qualitative:
• Quality of station and personnel appearance/presentation
• Merchandising
• Quality – customer service
 Steady growth of new customers
 Retention of old/regular customers
 No customer complaints
• Ability to plan
 Business strategy
 New programs/promotions

▪ Workforce:
• Sufficient manpower at all times
• Alert and highly inspired frontliners and service personnel
• Low turnover/absenteeism
• No personnel injuries/accidents

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 THE SELECTION PROCESS

The selection process described here applies to all types of stations but more
particularly to company-owned stations. It involves three phases:

Phase I Screening
Phase II Training and Testing
Phase III Installation

I. Screening:
 Dealer Application received
 Preliminary interviews
 Dealer is evaluated against criteria
 Background check and home visit
 Financial soundness check
 Panel interview by Dealer Selection Committee
 Applicant found suitable for dealership
 Recommend for training and testing

II. Training and Testing:

 3-day orientation on Petron dealership and on-the-job observation
 Applicant demonstrates interest and potential aptitude for station
work
 4-week Dealership Management Course
 Applicant passes course
 Training Director endorses applicant as ready and qualified for
dealership

III. Installation:

Applicants who pass the screening stage but cannot be installed

immediately for lack of available sites, will be placed in an Active Pool. As soon
as an opening exists, the applicants will again be called for further discussion,
evaluation and comparison with other candidates.

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 HOW TO APPLY

1. Get to know the service station business by reading the Primer on Petron Dealership
Program.

2. Accomplish the Dealer Application Form consisting of three parts:

Part I. Dealer Application

Part II. Financial and Personal Statement
Part III. Business Plan

3. The initial screening will be based on the content of the application. So take time to
fill out the required date and information. Do not leave blank spaces. Put “NA” in
the blank if information sought is not applicable to your case.

4. Submit application to:

Luzon applicants: Visayas and Mindanao applicants:

Luzon Reseller Manager VisMin Reseller Manager
Ground Flr. San Miguel Head Office Petron Corporation
Complex, 40 San Miguel Avenue Mandaue Terminal
1150 Mandaluyong City Looc, Mandaue City
Tel No. (02) 884 9251

5. Applicant will be informed in writing, of the status of his/her application after the
preliminary screening phase.

6. Petron shall only process applications forms duly filled-up and with complete
attachments. There is no need to follow-up applications as all applicants shall be
informed of their status.

7. Even if a dealer applicant undergoes the 4-week Dealer Management Course (DMC) it
does not serve as an assurance that he/she will be awarded the dealership to the
station that he/she applied for. The awarding of dealership (installation) is on the
sole discretion of the company based on a set criteria which include but are not
limited to DMC performance/ Panel Interview Scores and Background Checks.

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 CONFIDENTIAL

PETRON CORPORATION
Service Station Dealership Application Form

Name of Applicant:

Date of Application:

Location of Service Station

Applied For:

This form will help us become acquainted with your accomplishments and qualifications as a prospective dealer.
Read each item carefully and answer accurately. Answer all questions completely. Be sure to write additional
comments as requested.

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Personal Information 2” x 2” picture

Name (in full): Age:

Date of Birth: Birthplace: Ht. Wt.
Home Address:
Home Tel.: Fax:
Business Address:
Business Tel.: Fax:
TIN: SSS: Citizenship: Marital Status:

No. of Dependents: Name of Children Age

Name of Children below 21: ___________________________ _______
___________________________ _______
___________________________ _______
___________________________ _______
___________________________ _______
___________________________ _______
Spouse’s Name
(Indicate address, if different from you)

Educational Attainment:
Presently Employed?
Primary HS Undergraduate College Undergraduate Yes
Elementary HS Graduate College Graduate No

Highest level achieved: Degree:

Name of college and/or postgraduate school:

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Employment/Business Experience

Present occupation: Position: Date employed:

Company: Address: Tel. No.:
Describe duties, responsibilities

Previous employment/business experience. Begin with your most recent, (Use extra sheet if necessary)

Date Ave. Mo.

From To Company/Employer Address Earning

Position with longest service: Company: No. of Years:

Type of work – describe briefly
Activities in previous work with very much experience-check as many as possible:
Indoor work Clerical Mechanical
Outdoor work Contact with person Auto repair
Physical activity Selling Eqpt maintenance
Standing, moving Supervision Housekeeping

Have you ever been self-employed? If so, explain.

If you have sales experience, indicate line or product sold.

Type of selling: Chief product sold: Did you contact customer in their home/office?
Inside Yes
Outside No

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Financial Information
Do you own your home (partially or entirely paid for)?
At what age did you begin to support yourself? Please elaborate.
Have you any financial obligations such as loans, debts, or liabilities?
Exceeding a total of P
= 500,000 (other than current bills or mortgage)?
Source of Income
Applicant’s Employer: Position: Salary PA:
Address of Employer How long connected?
Spouse’s Employer Position: Salary PA:
Will you resign if appointed dealer?

Other Source of Income

Business Name Est. Annual Income
Business Address
How long established? Is business still ongoing?

Real Estate Property Owned by Applicant/Spouse, Valuation

OCT/TCT Location Area Market Value Mortgage if any

Building & Other Improvements

Description Location Area Market Value Mortgage if any

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 Valuable Personal property Owned by Applicant/Spouse
Car/Truck Make Model Plate No. Where Registered Mortgage if any

Shares of Stocks
Bonds Par Value Market Value Maturity Date (if any)

Liabilities
Description Location Area Market Value Mortgage if any

Credit and Bank Reference

Length of Kind of Amount Credit
Name of Bank/Person Dealings Dealings Deposited Extended

Insurance of Applicant/Spouse
Name of Insured Kind Company Amount Maturity Date

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 Assets Liabilities
(P
=) (P
=)
Cash on Hand/In Banks : Accounts Payable :
Inventory (Goods) : Miscellaneous Accruals :
Accounts Receivable : Loans Payable :
Investments : Other Liabilities :
Fixed Assets:
Other Assets : Total Liabilities :
Net Worth
TOTAL ASSETS : TOTAL LIABILITIES & NETW ORTH

ANNUAL AVERAGE FOR THE LAST THREE (3) YEARS (P

= ):

Net Sales :
Gross Income :
Net Income :

Other Information
Health
Do you have any physical handicaps or special precautions and worries about health that would
be shown by a medical examination? (For example: hearing, eyesight, foot ailments, rupture,
allergies, lung or heart condition, stomach condition, headaches, arthritis, sinus, asthma,
affected by fumes or cold.

Yes No If yes, explain

Have you had any illness during the last five years that required the services of the physician?
Yes No If yes, explain

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Social Activities
List your sports and recreational activity:

Leadership/Academic awards, prizes, recognition in sports, hobbies, etc.:

List all civic social, military, business organization or clubs where you are an active member:

How will your home condition influence your success in this type of business? (Consider your
family friends, ambitions, home worries, finances and living requirements);

Personal References

List 3 persons who have known you for 5 years or more (not relatives or former employers):
Name Address Business/Occupation

I hereby certify that the information furnished above are true and correct to the best of my
knowledge.

Signature of applicant

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